Mar 18, 1988

TRIPS NEGOTIATIONS ON TRIP OF ITS OWN?

GENEVA, March 16 (IFDA/CHAKARAVRTH RAGHAVAN) The negotiating process in the Uruguay Round GATT negotiating group an the so-called "Trade-Related aspects of Intellectual Property Rights" (TRIPS), including trade in counterfeit goods, has still not been able to advance beyond the work envisaged for the initial phase, according to participants.

The group chaired by Amb. Lars Aneil of Sweden, is to hold its next meeting in the week of May 16.

Participants said that the attempts by the U.S. and Japan to expand the Punta del Este mandate, and use the negotiations to set new and enhanced international norms and standards for protection of the Intellectual Property Rights (IPRS) through GATT has been principally responsible for inability of the group to make. Progress and establish a common negotiating basis.

There were now not only serious divergences and opposing stands and positions as between U.S.-Japan an the one side and the leading third world countries an the other, but also as between U.S. and Japan and other industrial countries, according to these sources.

The U.S. and Japan are trying to take the trips negotiations "on a trip of its own", well outside and contrary to the Punta del Este mandate, and until this issue is resolved and the two agree to keep their demands well within the letter and spirit of the mandate, little progress could be expected, the sources suggested.

The negotiating group has two different issues before it, one relating to trips and the other to the trade in counterfeit goods, the original subject under which this issue was infiltrated into GATT and Uruguay round by the U.S. and other industrial countries.

But so far little attention has been paid to the counterfeit trade issue, where the negotiating objective is different, and the U.S. and Japan have been trying to confuse the two and mix them up in their efforts to create a new multilateral framework for IPRS inside GATT, participants said.

On TRIPS, the negotiators have been asked to "to clarify GATT provisions and elaborate as appropriate new rules and disciplines". But the purpose of this has been spelt out as reduction of "distortions and impediments" to international trade, "taking into account" the need to promote effective and adequate protection of intellectual property rights, and to ensure that "measures and procedures to enforce IPRS do not themselves become barriers to legitimate trade".

While the U.S. and Japan have been making promotion of effective and adequate protection of IPRS as the objective itself, and calling for enhance protection, third world countries have been insisting that this is only to be "taken into account", and the prime purpose of new rules and disciplines would be to reduce distortions and impediments to international trade, and to ensure that measures and procedures for enforcement of IPRS do not themselves become barriers to "legitimate trade".

On this issue, even the other industrial countries do not appear to be ready to back the U.S. in evolving new norms and standards through the GATT negotiations, participants have said.

At the last meeting in the week a February 29, nor way an behalf of the Nordic countries reportedly put forward same suggestions which was welcomed by a some of the participants (both industrial and third world), but ran into opposition from others on the ground that it went beyond the negotiating mandate.

The Nordic paper starts with the assumption that the problems, in this area in GATT arise from complex factors involving both basic standards/norms for IPRS and their enforcement, and the two should be considered together in the group.

It also speaks of trade problems "stemming from inadequate, excessive or discriminatory standards/norms and/or enforcement mechanisms", and suggests application of what it calls "key GATT principles" in this area.

The negotiations, it suggests, should address "broad coverage of rights", and deal with complaints about "inadequate or non-existing standards/norms" in international conventions.

An the "enforcement mechanisms" of relevance to trips, the Nordic paper argues that since problems stem from both standards/norms and enforcement mechanisms, enhance disciplines and rules should cover bath elements.

While the Nordic paper was purportedly intended to bridge the wide gap within the group, a number of third world countries rejected the idea that the group could deal with standards/norms of IPRS. India, Egypt, Ghana, Mexico, Nigeria and Colombia were among those who reportedly insisted that the group was concerned with purely trade-aspects, and could not deal with the setting of new international norms.

The latter, India reportedly stressed, was a matter for the World Intellectual Property Organisation (WIPO), and not GATT.

The negotiating mandate, bath for IPRS and counterfeit goads, was circumscribed by the provision that "the negotiations shall be without prejudice" to other complementary initiatives in WIPO and elsewhere an these matters.

Same of the third world participants said they would have no difficulty in accepting the principle of non-discrimination in application of enforcement mechanisms etc, but the idea in the Nordic paper for "national treatment" principle as spelt out in GATT was -quite another matter that would need carefully examination.

In response to a number of questions and critical remarks, the Norwegian Delegate reportedly agreed that there was "an element of vagueness" in the paper, and attributed this to "different levels of maturity" on this issue within the Nordic countries themselves. He agreed that some of the paints would need further clarifications in further substantive discussions.

The U.S. far its part reportedly cited the assessment of its international trade commission, based on surveys of over 700 U.S. enterprises, that losses to these enterprises due to inadequate protection was estimated in 1986 to 23.8 billion dollars, and for the country as a whole at 61 billion dollars.

However the relevance of these us estimates to the negotiations was challenged by others. Any estimations based an what would be the benefit to U.S. enterprises if other countries adopted us standards in terms of life of such rights or of protecting products and processes etc. or extending protection to new areas, was irrelevant in terms of the-existing international conventions, and estimates based an such U.S. views were mere "guestimates" of no relevance to the negotiations", some participants later noted.

Other participants noted that the entire U.S. presentation carefully avoided the issue of "non-discrimination" in respect of enforcement mechanisms and other issues.

This, they said, was a sore point even among the other major trading partners, since the U.S. law provided for discriminatory treatment in respect of domestic violations and those from imports coming from abroad.

The EEC, and this issue, reportedly said that it favoured an enforcement system, which would be efficient, rapid, and non-discriminatory and applicable bath at the border and internally. It also stressed the importance of multilateral solutions to these problems, rather than unilateral measures or bilateral pressures.

In an obvious reference to the U.S. regime, Canada agreed an the importance of non-discriminatory regime in respect of enforcement due to differences with the U.S. on this issue, the U.S.-Canada free trade pact excludes IPRS from its scope.

The U.S. reportedly responded that while enforcement was important, the negotiations should also clarify standards and norms.

Japan for its part reportedly suggested that enforcement and standards issue should be dealt with in parallel.

India reportedly said that attempts to bring standards and norms violated the Punta del Este mandates. India was however ready to examine problems of enforcement e.g. non-discriminatory application of non-discriminatory measures.

India also reportedly underscored the clear distinction in the mandate between the trips issue and the trade in counterfeit goods issue.

In the latter, India noted, the mandate called for the development of "a multilateral framework of principles, rules and disciplines", while in the former the clarification of GATT provisions and elaboration as appropriate of new rules and disciplines had been carefully circumscribe, and the need not to prejudice legitimate trade had been underscored.

In any event, both negotiations, had to be without prejudice to complementary initiatives in WIPO and elsewhere.

By raising the issue of "inadequate IPR protection", the entire question of IPR regimes of national governments could not be injected into GATT nor could national laws in this regard be challenged with regard to coverage or duration of patents.

The U.S. and Japanese insistence within the group that the issue of norms and standards should be addressed had been responsible for the group making little headway so far.

The negotiating group must clarify the scope of its mandate and reached a common understanding on the subject matters for negotiations.

The EEC reportedly said that in dealing with enforcement, the negotiations should also aim at providing safeguards against such mechanisms becoming barriers to legitimate trade.

It would be necessary to define "infringement" of IPRS and there would be need to provide for "effective defence mechanisms to safeguard interests of importers and exporters", with adequate provision for compensation and damages.

In reiterating the need for non-discriminatory enforcement mechanisms, Canada reportedly noted that WIPO and other existing IPR disciplines represented "a negotiate consensus", and these should be relied upon as a basis far the work in the group.

Also, in the Canadian view, the Berne convention an copyright etc., was mare comprehensive than the UNESCO convention.

The U.S. is a party to the UNESCO sponsored convention, and not to the earlier Berne convention.

In the Canadian view there should be broad adherence to existing IPR conventions and agreements, and there should be provisions against abusive use of IPRS, and prevent "segregation of markets".

A number of speakers underscore the view that the proposed provisions should not be used to prevent "parallel imports" - import of same patented or trademarked goods from markets where they are sold cheaper, thus preventing abusive use of such IPRS to share markets a common TNC practice.

An the issue of trade in counterfeit goods, India reportedly noted that this was the first substantive discussion of the issue in the group, and the work of the expert group under the 1982 GATT work programme could be a basis for further work. India was willing to extend scope of the work beyond trademarks and patents to violations of copyrights in video or audio piracy. It was also willing to consider non-discriminatory set of procedures to deal with such trade at the border.

The EEC wanted provisions to permit national authorities to intervene at the request of IPR holders, not only at the stage of importation, but also of exports and goods in transit.

However to prevent abusive application, IPR holders applying

For intervention should be required to meet the costs of such customs actions.

Also, any official decision should be subject to court actions, and there should be no summary border procedures at customs.

Canada wanted governments to be obliged to remove economic incentives for trade in counterfeit goods, but without creating any additional barriers to legitimate trade. Customs authorities should be permitted to "detain" goods only and the basis of court orders, and there should be transparent and non-discriminatory procedures.

On the view of some that prior court orders would result in the disappearance of offending imports, India reportedly noted provisions in its laws that enabled the customs "to detain" goods for one month pending court actions. While customs "seizures" could be done only through court actions, goods complained of could be "detained" far a maximum period of one month to enable parties to move the courts.

India however underlined the difficulty of dealing with "goods in transit", noting that these matters were governed by transit treaties, and the goods in question transited through India in Customs bond and not subject to Indian laws, excepting in cases involving public health or safety and security.

The EEC reportedly agreed that its suggestion in this regard needed to be further examined in the light of applicable international law and treaties.